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March 3, 2012

Stocata FOREX Update EUR/USD: March 3, 2012.

Last week I wrote: " For the short to medium term I am now expecting the EURO to move up further to the level of the 161.8% Fibonacci target and the 200 day average around 1.375. While we are still looking out for a wave 4 correction in the S&P500 index, there may be a consolidating influence on the EURO".

While we finished the week in the S&P500 index with a small gain, we lost the "normal" sync between the S&P500 and closed the week for the Euro with a lower price. If of course next week the S&P500 starts his correction, the synchronisation will be there again. The previous top was tested Tuesday and Wednesday without success. Friday the Euro closed below the 100 day average. All indicators are turning down from the top. We should expect a further down move. SATS5 turned black for an open short position.

Hourly Chart:

Weekly Chart: on the weekly chart, price probably completed wave (C) and {B}, starting the longer term wave {C} up. All indicators are moving up. This means we can expect further higher Euro prices the coming weeks. But if we already made the top of long term wave [B], we have to be prepared for a longer term down move to complete wave [C]. A higher Euro seems to conflict with the daily and monthly chart for the moment and it also bounced against the resistance of the 100 week average. There is a chance that we will see a turn down also in the weekly chart creating a hidden divergence that will push the Euro below the last low towards 1.25. The long term weekly SATS5 is black.

Monthly Chart: March 3, 2012: The Euro made a long term top Elliott wave [5] around $1.60 July 2008. A correction wave {A} was started, retracing almost 50% of the complete up move. Next the correction wave {B} retraced a big part of the {A} wave, before starting the {C} and with that completing wave [A] down. This [A] wave bounced up from the 50% retracement level and the 200-month moving average. The question is if the lowest level has been reached at that point. After an up correction wave [B], we will have the [C] wave down. Question is did we already finish the [B] wave up or not? The support of the 100 Month average is broken and we fell out of a previous up moving pitchfork. The evolution of the chart shows the intention of making an upturn. But the resistance of the 100 month average may be too strong and force the Euro down again. Best guess for now is a lower Euro in March. The long term SATS5 expert is red for a long term open short position (Chart is updated until 03/02/2012).